2017 Great Expectations

1. 2017 : Great Expectations
2016
Nothing to Cheer
2017
Much to Fear

2. Citizen X – Elite
Intl Flight: LOS – LHR (return)
Jan’16 (N180,000) Jan’17 (N613,000)
Chicken - 1kg
Jan’16 (N800) Jan’17 (N1,200)
Corona Primary School Fees
Jan’16 (N320,000) Jan’17 (N460,000)
Diesel
Jan’16 (N160/liter) Jan’17 (N270/liter)
241%
50%
44%
69%

3. Citizen Y – Middle Class
Domestic Flight: LOS – ABV (Rtrn)
Jan’16 (N19,000) Jan’17 (N35,000)
Indomie (1 Satchet)
Jan’16 (N35) Jan’17 (N60)
Garri – 50kg
Jan’16 (N9,500) Jan’17 (N15,000)
Bus Fare (Lagos – Onitsha)
Jan’16 (N3,500) Jan’17 (N5,500)
Gala Snack
Jan’16 (N50) Jan’17 (N70)
84%
71%
57%
40%
58%

5. B u h a r i ’ s N e w Ye a r M e s s a ge J a n 1 2 016
Fuel shortages to be
eliminated
Greater security in the
N/East
Subsidies drastically cut, Queues
disappeared
Boko Haram degraded
21 girls rescued, 200 still missing
UNDELIVERED
Reduce reliance on oil
Crack Down on corruption
No impunity
Promote job creation
Prolonged trials with no verdicts
Oil production slumped to 1.6mbpd
Unemployment up to 13.9%
X
X
X
PROMISES DELIVERED

6. 2016 – Policy changes & impact
Partial deregulation of downstream Oil & Gas sector
MPR increased by 200bps to 14% p.a.
Flexible exchange rate policy
Official: N199/$N305/$ ; Parallel: N340/$  N490/$
Fixed exchange rate in practice
45% hike in electricity rate reversed
POLICY CHANGES

7. 2016– Economy still sucks (1)
GDP Growth (%)
Oil production (mbpd)
Exchange rate (N/$)
Inflation (%)
Revenue (N’trn)
1.6
56 *Spot Price*
490
-1.55
18.48 *Nov’16*
2.17 *Q3’16*
3.58 *Q3’16*
Accomplishments
Oil price ($/b)
Budget Objectives
4.37
2.2
38
197
9.81
Expenditure (N’trn)
3.86
6.06

9. 2016– Economy still sucks (2)
Stock market cap (N’trn)
Vacancy Factor Index
FBN PMI
External Reserves ($’bn)
Premium Motor Spirit
(N/Litre)
172.2
13.9
60
25.78
145
12/16
Unemployment (%)
01/16
9.76
160.2
12.1
44.6
28.98
86.5
9.25

10. Nigeria & Peers
Nigeria Ghana Kenya South
Africa
Angola
Growth Rate (%) -2.24 4 5.7 0.7 4.9
Unemployment (%) 33.2* 5.2 40 27.8* 26
Inflation (%) 18.48 15.50 6.35 6.60 41.15
Misery Index** 51.68 20.7 46.35 34.4 67.15
Gini Coefficient
(2005 – 2013)
43.0 47.7 42.8 65 42.7
** Unemployment + Underemployment + Inflation *Underemployment + Unemployment

11. Naira will trade at N350/$ (IFEM) & depreciate to N520/$ (Parallel)
Year on Year inflation to slow between 15% - 17%, after spiking towards 20%
US Fed to increase interest rate twice to 0.75%p.a. -1.25%p.a.
2017 Outlook
GDP growth 1.2% in 2017 from -2.24%

13. Gubernatorial elections to hold in Anambra state
2017 Outlook
Presidential elections to hold in: Kenya, Rwanda, Liberia, Sierra
Leone, France & Germany
African electorates are becoming more economically intolerant

14. Early signs of progress emerging
OPEC deal kicked in, pushing oil price to $57pb
11.61% above Q4 average of $51.07pb
2017 - morning makes the day
PMI (FBN) for December up 22.95% to 60 from 48.8
Moody’s projecting 2.5% growth for 2017